What is the impact of the coronavirus (COVID-19) on businesses in the Philippines?
- New Normal Established
- Impact On The Economy
- Barriers On Trade
- Monetary Struggles of Small and Start-Up Businesses
- Dwindling of Essential Stocks
The COVID-19 pandemic has been affecting businesses in the Philippines for almost two months, and the impacts are still very much being felt. If the pandemic isn’t controlled, a number of businesses may have to close, putting the Philippine economy in danger of collapsing.
Following the Enhanced Community Quarantine (ECQ) regulations, businesses are attempting to adapt to the additional requirements and guidelines. That won’t be enough, though, if the epidemic lasts for a longer amount of time. Here are some details about how COVID-19 is affecting Philippine businesses.
New Normal Established
In light of the epidemic, phrases like “social distancing” and the “new normal” are frequently used these days. The administration has suspended schools since last March in the area of education. Online learning is currently being considered by the Department of Education and other colleges as a means of advancing academically in these challenging times. These have shown to be inadequate, though, as not every person has a reliable broadband connection at home.
A few guidelines have been put in place to preserve safety precautions, however some firms that are classified as important have been permitted to stay open. Social separation is being tightly enforced in public marketplaces, and some local governments are offering their residents “mobile palengkes.” Employees at banks, restaurants, and other vital service providers like hospitals are still employed.
But those who worked in what are seen as “non-essential sectors” are now bearing the brunt of this unfavorable new normal. Certain employers are unable to offer work from home options or full remuneration. Checkpoints are making it harder for workers who live in other cities to get to work. certain businesses have experienced such severe losses that they were forced to let go of certain employees. The pandemic has severely harmed Filipino businesses and families.
Impact On The Economy
Without a doubt, a recession is currently imminent for the entire economy. The nationwide flow of supply and demand has been disrupted by the global pandemic, causing several corporate industries to move at a significantly slower speed. The National Economic and Development Authority (NEDA) has projected that the Philippines’ GDP could fall as low as -0.6% this year, according to Rappler.
Depending on how long the epidemic lasts, the Philippines might lose anywhere from P276.3 billion to P2.5 trillion. In the worst-case scenario, a 19.7% decline in the labor supply might cause the economy to slow down and enter a recession. But if the nation defeats the virus in the second quarter of this year, the labor supply might only fall to 7.4% while most industries continue to grow.
Nevertheless, a lot of Filipinos could lose their jobs if COVID-19 persists. Due to a lack of funding, businesses in the BPO, tourism, and aviation industries have had to fire staff members. In the meantime, it is well known that China provides the funding for the “Build, Build, Build” program’s infrastructures. The ongoing pandemic caused a halt to both the building process and the workers’ compensation. Lots of them work for a daily pay.
In addition, there are also a number of unfinished business buildings. COVID-19-related building delays could cause future business ventures to be delayed.
Barriers On Trade
The Philippines did not put any limitations on imports or exports within the nation in order to maintain economic viability. According to the Philippine Statistics Authority (PSA), which accounts for 18.8% of the nation’s overall trade, China is its biggest trading partner, according to a Pharmaceutical Technology article. This is in addition to imports from Korea and Japan.
2020 could see the Philippines’ commerce economy become more muted as a result of the coronavirus. However, maintaining the import-export system might be beneficial to the survival of our economy. The Philippine government issued an order exempting medical goods and equipment from taxes and fees. This complies with Republic Act No. 11469, which is referred to as the “Bayanihan Heal As One Act.” This removes all further barriers and makes it easy for the nation to obtain the goods it needs. This is really helpful for the large number of COVID-19 patients who are in need.
Monetary Struggles of Small and Start-Up Businesses
Large corporations might weather this economic downturn, but micro, small, and medium-sized businesses (MSMEs) in the Philippines are suffering the most financially. The Philippine Statistics Authority (PSA) has released its most recent List of Establishments. As of 2018, there were 998,342 MSMEs in the nation, accounting for 99.52% of all local firms. The ability of firms to maintain their operations and pay their employees is put to the test by a decline in customer demand. Some MSMEs make an effort to provide online and delivery services in order to keep up with the ever-changing demands of the market. However, in order to meet their financial expectations, fewer staff are required.
A CNN Philippines article claims that the government has already allocated P51 billion in pay subsidies for microbusinesses and P120 billion in credit guarantee schemes. This is made possible by the low-interest lending program for small firms offered by the Department of Trade and Industry in conjunction with the Department of Finance. These could help business owners pay their employees and preserve their financial holdings.
Dwindling of Essential Stocks
During a pandemic, it is typical for necessary supplies to be often unavailable. After the Enhanced Community Quarantine was implemented across the entire island of Luzon for two months, residents have feverishly hoarded food supplies, rubbing alcohol, and other items. imposing new regulations on supermarkets and the government in order to stop additional shortages.
A few enterprises increased their output as a result of government incentives offered through routinely levied levies to those manufacturing necessities. In order to help with production, the government also permitted the return of 50% of the staff. various companies are surviving the detrimental economic consequences of the pandemic by utilizing various unconventional strategies in addition to online means of product delivery to their customers.
If we don’t take action against the infection sooner, these problems might not go away. Private corporations might weather the economic downturn, but smaller businesses and Filipino laborers might finally lose everything they own. The days ahead could do terrible harm to the Philippine economy unless the pandemic is contained.
Currently, governments all around the world are dealing with a dilemma brought on by the abrupt socio-economic danger posed by COVID-19. Even though its effects are becoming more apparent every day, keeping its most significant industries alive is essential to averting an economic catastrophe. Given the impact of COVID-19 on Philippine enterprises, everyone is facing significant challenges at this moment. But after adjusting to the new normal and working together to find answers after the epidemic, businesses might prosper once again.